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ManufacturingStrategy Concepts
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Manufacturing is Complex –WHY ?
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Manufacturing is complex because it involves;- large number of employees (skilled or unskilled)- formal and informal system or procedures- good and bad practices- old and new culture
Manufacturing changes slowly as it takes time to:
- build facilities
- install new equipment
- develop new suppliers
- change operating procedures
- train personnel
!hile customer requirements changes quickly"
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Manufacturing Strategy
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Business Strategy
# company$s business strategy is the sum of individual
strategies of its component functions i"e" manufacturing
marketing % sales &%' finance etc"
Manufacturing Strategy
# manufacturing strategy consists of a sequence of
decisions that over time enable a business unit to achieve
a desired manufacturing structure infrastructure and set ofspecific capabilities"
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Taxonomy of ManufacturingStrategy
4 Figure 1: Retrieved from Restoring Our Competitive Edge by R.H. Hayes & S. C. Wheelright a!d from "#a!ufa$turi!g Strategi$ %la!!i!g by '. (. )arvi!.
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Functional Strategies
*he third level of strategy is $om+rised of fu!$tio!al strategies.
,!$e busi!ess u!it has develo+ed its busi!ess strategy- ea$hfu!$tio!al area develo+ strategies that su++ort this strategy.
sually ma!ufa$turi!g busi!ess has the folloi!g fu!$tio!alstrategies:
1.Marketing & Sales Strategy2.Manufacturing Strategy3.Research & Development Strategy4.ccounting an! Financial Strategy
/.0uality (ssura!$e.Field #ai!te!a!$e et$
*o be effe$tive- ea$h fu!$tio!al strategy must su++ort the$om+etitive adva!tage bei!g folloed by the busi!ess strategy.
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Manufacturing Strategy Decision"ategories
Manufacturing StrategyStructural
Infrastructural
Figure 2: 'e$isio! Categories of #a!ufa$turi!g Strategy
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Manufacturing Strategy Decision"ategories
he first four decision categories in igure * are typically viewed as
structural because of their long term impact difficult to reverse
once they are in place and large investment required to extend or
alter"
he last four decision categories in igure * are considered to be
infrastructural (tactical) because they encompass multiple ongoing
decisions are linked with specific operating aspects of business and
generally do not require high capital investments"
hese eight decision categories are closely interrelated" orexample total annual capacity of the manufacturing facility depends
on whether its production rate is maintained at about the same level
or changed frequently" +imilarly workforce policies interact with
facility and production planning choices"
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Manufacturing Strategy Decision"ategories
or vertical integration
Table 1: Manufacturing Strategy Decision Categories
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Manufacturing Strategy Decision"ategories
Management make decisions and formulate strategies in
all these categories"
,ach of the category provides variety of choices and can
have a maor impact on manufacturing function$s abilityto implement and support the organi.ation/s business
strategy"
0t is critical that decisions made throughout in theorgani.ation at all levels must be consistent with other
decisions made at other point in time and within other
categories"
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"riteria for #valuating aManufacturing Strategy
Consistency1etween the manufacturing strategy and the overall business strategy1etween the manufacturing strategy and the other functional strategies within
the business #mong the decision categories that make up the manufacturing strategy1etween the manufacturing strategy and the business environment (resources
available governmental restraints etc")
Contribution (to competitive advantage)Making tradeoffs and enabling manufacturing to set priorities that enhance the
competitive advantage2romoting clarity regarding the manufacturing strategy throughout the
business unit so its potential can be reali.ed2roviding the manufacturing capabilities that will be required by the business
in the future
t t t
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ey utput arameters(KOPs in
Manufacturing( $ustomer buys a +rodu$t or servi$e be$ause of hisher+er$e+tio! of
"ost
$uality
Delivery timeFle%iility
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0nitial 3ost
(e"g" purchase cost of an automobile)
4perating 3ost
(e"g" gasoline cost per mile)
Maintenance 3ost
(e"g" cost of a tune-up5repair)
"ost
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2roduct quality directly influences the marketability of a product and
customer satisfaction" 2roduct with high quality should provide
following characteristics;
2erformance: he basic operating characteristics of a product; for
example how well a car handles its gas mileage"
eatures: he 6extra6 items added to the basic features such as astereo 3' or a leather interior in a car"
&eliability: he probability that a product will operate properly within
an expected time frame or the measure of confidence of a consumer
towards a particular product",g" a +ony 7 will work without repair for about seven years"
3onformance: he degree to which a product meets pre-established
standards" here should be an agreement between the designed and
the actual product standard to meet customer specifications","g" Mercedes 1en. state of the art standardi.ation and conformance
'ro!uct $uality
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!elia"le #s$ %ali&
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Reliability = Stability = Precision
Validity = Conformance = Accuracy
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'urability: 8ow long the product lasts; its life span before replacement
or a capability of a product to resist wear and tear or decay etc" # Moltifoam with care might be expected to last a lifetime"
+erviceability: he ease of getting repairs the speed of repairs and
the courtesy and competence of the repair person"
#esthetics: 8ow a product looks feels sounds smells or tastes"
+afety: #ssurance that the customer will not suffer inury or harm from
a product; an especially important consideration for automobiles"
'ro!uct $uality
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Time and timeliness: 8ow long a customer must wait for service" or
example is an overnight package delivered overnight9
Completeness: 0s everything the customer asked for provided9 or
example is a mail order from a catalog company complete whendelivered9
Courtesy: 8ow customers are treated by employees" or example
are phone operators at 23 nice and are their voices pleasant9
Consistency: 0s the same level of service provided to each customer
each time9 0s your newspaper delivered on time every morning9
!"#IT$ %&'M T C'*S!M&+S
,&S,CTI-
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"ccessibility and convenience: 8ow easy it is to obtain the service"
or example when you call ,+3 does the service representative
answer quickly9
"ccuracy: 0s the service performed right every time90s your bank or credit card statement correct every month9
&esponsiveness: 8ow well the company reacts to unusual
situations which can happen frequently in a service company" or
example how well a telephone operator at worldcall is able to
respond to a customer/s questions about a query not fully described in
the instructional manual 5 website"
!"#IT$ %&'M T C'*S!M&+S
,&S,CTI-
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1efore 'elivery:
,ase of 4rdering (ability to order over 0nternet phone)
#vailability (in-stock)
+peed (lead time - elapsed time from placement of order until its
receipt)
0nformation #vailability (use 0nternet for real-time order status)
#fter 'elivery:
#ccuracy53ompleteness (correct items in correct quantities)
'ependability (on-time delivery)
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1. Machine flexibility
Capability of a machine to perform a variety of operations on avariety of part types and sizes. It depends on changeover, ease ofmachine programming, tool storage capacity etc.
2. Routing flexibility
lternative machines, se!uences or resources can be used formanufacturing a part for changes resulting from e!uipment
brea"do#ns, tool brea"ages, controller failures, etc.
It depends on the similarity of the parts in the mix, similarity andduplication of #or"stations etc.
Flexibility
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$. %rocess flexibility
bility to absorb changes in the product line by performing similar
operations. &he process generalization method #hich can be used for more than
one product .
e.g. painting a car is a flexible process #hich have a generalized rangeof car sizes that it can adapt to.
'. %roduct flexibility
bility to change over to a ne# set of products economically and!uic"ly in response to mar"ets.
(ifferent variants in a model but closely related in design e.g. )ord producing mini truc"s as #ell as *+s - cell phones of
different models
Flexibility
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. %roduction flexibility
bility to produce a range of part styles / products that can be produced on the systems #ithout adding capital e!uipment /investment.
0. olume flexibility
bility to economically produce parts in high and lo# !uantities of
production in order to respond unanticipated demand to meetcustomer needs. It depends on the level of manual labour performing production, amount invested in capital e!uipmentetc.
Flexibility
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. xpansion flexibility
ase #ith #hich the system can be expanded to increase total production !uantities . It depends on the expense of adding the#or"stations, ease #ith #hich layout can be changed / expanded,type of part handling system used, ease #ith #hich properly trained
#or"ers can be added.
Flexibility
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. #ilte!burg 25567 divided ma!ufa$turi!g out+uts i! si8$ategories- give! i! *able 2.
(utput 'arameters inManufacturing
Table .: Manufacturing 'utputs
$uality
'ro!uct fle%iility
)olume fle%iility
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#a+es et al 19967 divided ma!ufa$turi!g out+uts i! seve!$ategories- i.e. $ost- uality $o!siste!$y- uality s+e$ifi$atio!-lead time- delivery reliability- fle8ibility- a!d i!!ovative!ess.
1.*he differe!$e i! the !umber of out+uts is due to the la$; ofge!erally a$$e+ted defi!itio!s of these ;ey $o!$e+ts.
2.*he differe!$e i! the !umber of out+uts is be$ause of thelevel of a!alysis.
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(utput 'arameters inManufacturing
=o factory in the world can provide all outputs at the
highest possible levels so it is important which output is
important to customers now and which will be important in
the future"
4nce we know which outputs customers require then we
can select the production 5 manufacturing system that is
best able to provide these outputs
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2roduct layout
2rocess layout
"lassification of 'ro!uction Systems
%igure /: Classification of ,roduction Systems (0 Miltenburg 2.334)
%ur+ose built eui+me!t
=!gi!eeri!g & mouldi!g
(utomotive
%etro$hemi$als
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